Ogra recommends up to 3.4pc reduction in petroleum prices

ISLAMABAD – The Oil and Gas Regulatory Authority (Ogra) Friday proposed a reduction of Rs 2.40 per litre in the price of High Speed Diesel (HSD) for the month of December, 2019.

In a summary moved to Petroleum Division, Oil and Gas Regulatory Authority (Ogra) has proposed a decrease of up to 3.4 percent in the prices of various petroleum products.

As per the summary, Ogra recommended a decrease of Rs2.4 per liter (1.9 percent) for High Speed Diesel, Re0.25 (0.2 percent) in the price of petrol, Rs2.9 per liter (3.4 percent) in the price of Light Diesel Oil (LDO) and Re0.83 (or 0.9 percent) cut in kerosene oil.

OGRA has sent the summary to the Ministry of Energy (Petroleum Division) and that would be forwarded to the Finance Ministry for approval. The government would take decision on the Ogra’s summary on Saturday (today).

HSD is used in heavy transportation fuel, LDO in industries, petrol is being used in public transportation while kerosene is used for cooking purpose, especially in remote areas where LPG or pipeline gas is not available. If the government accepts the Ogra’s recommendation, petrol price will come down from the existing Rs114.24 per litre to Rs113.99 per litre, High Speed Diesel price will reduce to Rs125.01 per litre from the current Rs127.41 per litre, LDO price will reduce to Rs82.43 per liter from Rs85.33 per liter and kerosene oil price will come down from current Rs97.18 to Rs96.35 per litre.

It is worth mentioning that the government is charging 17 percent general sales tax (GST) on all petroleum products. Apart from it, the government is also collecting petroleum levy (PL) on these products which is taken from consumers. Currently, the government is charging Rs18 per liter petroleum levy on HSD, Rs 15 on petrol, Rs 6 on kerosene and Rs 3 on LDO.

In the previous government of the PML-N, the petroleum levy was being charged in the range of three to 10 rupees a liter on these products but the present government has increased it.

It is worth mentioning that the Brent oil price in international market on November 29 was $62.9 per barrel, while on October 30, its price was $61.15 per barrel, on September 27 $62.22 per barrel, August 30 it was $60.14 and on July 30, it was $64 per barrel. Earlier, in April and June, it was hovering near $72 per barrel.

Meanwhile, the government has increased the price of indigenous Liquefied Petroleum Gas (LPG) by Rs17.87 per 11.8kg cylinder for the month of December.

As per notification issue by Oil and Gas Regulatory Authority (OGRA) the LPG price has been increased by 1.51 per kg which will enhance the price of the gas to Rs128.27 per kg. The new prices would be effective from December 1.

For November, OGRA had notified LPG price at Rs1495.86 per cylinder or Rs126.76/kg.

The producers’ price of LPG (propane 40 percent and butane 60 percent) has been determined at 69,971.31/ton (in November it was at 58,680/ton). This price included excise duty of Rs85/ton, while excluding the petroleum levy. Under this head, the producer price of Rs825.66/11.8kg cylinder has been worked out.

Marketing/distribution margin has been set at Rs35,000/ton or Rs413/cylinder, a petroleum levy of Rs4,669/ton would also be charged, which would translate into Rs55.09/ cylinder.

Prior to the imposition of general sales tax (GST), the consumer price would be Rs109,640.3/ton (in November it was Rs108,349/ton), while the price of the 11.8kg cylinder is Rs1,293.75. Additionally, a GST of 17 percent on Rs109,640.3/ton would be Rs18,638.85 or Rs219.94 for a cylinder.

The final price per ton would be Rs128,279.16/ton or Rs1,513.69/cylinder.

Since July 2019, the LPG price is hovering between Rs1327.76 to 1,513.69/cylinder.

According to details, in July 2019, the government notified LPG at Rs1330.92/cylinder, August Rs1350.03, September 1327.76, October Rs1475.63, November 1,495.86 and now for the month of December the government fixed it at Rs1,513.69/cylinder.